COVERED ASSETS AND FDIC INDEMNIFICATION ASSET (Tables)

9 Months Ended

Sep. 30, 2012

COVERED ASSETS AND FDIC INDEMNIFICATION ASSET

Carrying amounts and composition of covered loans

	September 30,			December 31,
	2012			2011
	(In thousands)
Real estate loans:
Residential single-family	$	385,287		$	442,732
Residential multifamily	721,775			918,941
Commercial and industrial real estate	1,480,742			1,773,760
Construction and land	458,229			653,045
Total real estate loans	3,046,033			3,788,478
Other loans:
Commercial business	632,292			831,762
Other consumer	88,682			97,844
Total other loans	720,974			929,606
Total principal balance	3,767,007			4,718,084
Covered discount	(582,545		)	(788,295		)
Net valuation of loans	3,184,462			3,929,789
Allowance on covered loans	(5,877		)	(6,647		)
Total covered loans, net	$	3,178,585		$	3,923,142

Covered nonperforming assets, by credit quality indicators

			Special
	Pass/Watch		Mention		Substandard		Doubtful		Total
	(In thousands)
September 30, 2012
Real estate loans:
Residential single-family	$	366,326	$	2,079	$	16,882	$	—	$	385,287
Residential multifamily	621,633		12,272		87,870		—		721,775
Commercial and industrial real estate	1,033,938		8,214		431,691		6,899		1,480,742
Construction and land	178,554		30,771		247,683		1,221		458,229
Total real estate loans	2,200,451		53,336		784,126		8,120		3,046,033
Other loans:
Commercial business	445,844		30,587		155,328		533		632,292
Other consumer	86,388		—		2,294		—		88,682
Total other loans	532,232		30,587		157,622		533		720,974
Total principal balance	$	2,732,683	$	83,923	$	941,748	$	8,653	$	3,767,007

			Special
	Pass/Watch		Mention		Substandard		Doubtful		Total
	(In thousands)
December 31, 2011
Real estate loans:
Residential single-family	$	427,918	$	1,085	$	13,729	$	—	$	442,732
Residential multifamily	779,694		26,124		113,123		—		918,941
Commercial and industrial real estate	1,249,781		43,810		472,003		8,166		1,773,760
Construction and land	242,996		40,859		362,958		6,232		653,045
Total real estate loans	2,700,389		111,878		961,813		14,398		3,788,478
Other loans:
Commercial business	643,117		34,707		149,253		4,685		831,762
Other consumer	96,342		—		1,502		—		97,844
Total other loans	739,459		34,707		150,755		4,685		929,606
Total principal balance	$	3,439,848	$	146,585	$	1,112,568	$	19,083	$	4,718,084

Covered nonperforming assets

	September 30,		December 31,
	2012		2011
	(In thousands)
Covered nonaccrual loans(1) (2) (3)	$	215,522	$	194,506
Covered loans past due 90 days or more but not on nonaccrual	—		—
Total nonperforming loans	215,522		194,506
Other real estate owned covered, net	27,613		63,624
Total covered nonperforming assets	$	243,135	$	258,130

(1)Covered nonaccrual loans include loans that meet the criteria for nonaccrual but have a yield accreted through interest income under ASC 310-30 and all losses on covered loans are 80% reimbursed by the FDIC.

(2)Represents principal balance net of discount.

(3)Includes $26.2 million of loans accounted for under ASC 310-10, of which some loans have additional partial balances accounted for under ASC 310-30.

Changes in the accretable yield for the covered loans

	Three Months Ended
	September 30,
	2012			2011
	(In thousands)
Balance at beginning of period	$	620,468		$	980,932
Additions	—			—
Accretion	(48,332		)	(51,307		)
Changes in expected cash flows	(33,920		)	(49,581		)
Balance at end of period	$	538,216		$	880,044

	Nine Months Ended
	September 30,
	2012			2011
	(In thousands)
Balance at beginning of period	$	785,165		$	1,153,272
Additions	—			—
Accretion	(128,968		)	(162,747		)
Changes in expected cash flows	(117,981		)	(110,481		)
Balance at end of period	$	538,216		$	880,044

FDIC indemnification asset activity

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2012			2011			2012			2011
	(In thousands)						(In thousands)
Balance at beginning of period	$	409,287		$	630,437		$	511,135		$	785,035
(Amortization)	(7,060		)	(14,325		)	(24,918		)	(48,034		)
Reductions (1)	(30,918		)	(43,349		)	(107,936		)	(164,238		)
Estimate of FDIC repayment (2)	(2,836		)	(3,606		)	(9,808		)	(3,606		)
Balance at end of period	$	368,473		$	569,157		$	368,473		$	569,157

(1)Reductions relate to charge-offs, partial prepayments, loan payoffs and loan sales which result in a corresponding reduction of the indemnification asset.

(2)This represents the change in the calculated estimate the Company will be required to pay the FDIC at the end of the FDIC loss share agreements, due to lower thresholds of losses.